Both the indirect and direct method of preparing a statement of cash flows begin with net income.

Name: Both the indirect and direct method of preparing a statement of cash flows begin with net income.
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The direct method explicitly (directly)identifies the major sources and uses of cash.In contrast,the indirect method starts with net income as reported on the income statement,followed by the adjustments necessary to convert the accrual-based net income figure to a cash-basis equivalent.

Both the Indirect and Direct Method of Preparing a Statement